Virginia State Overview

State Facts

Analysis

Virginia is one of the freest states in the country, ranking eighth overall. However, it fits the red state stereotype in that it fares better in terms of economic freedom (6th) than personal freedom (38th).

Virginia’s tax burden, government spending, and debt are all well below national averages. It is also fiscally decentralized compared to other states. However, state and local government employment is roughly at the national average.

Virginia performs solidly on regulatory policy as well. Its tort system is one of the best in the country, more than a standard deviation better than average. Labor laws score well, based on Virginia’s status as a right-to-work state. However, Virginia does not fare as well on occupational freedoms. It scores above average on licensing but poorly on education/experience requirements for licensed occupations. Residential use regulations are slightly better than average, and Virginia has improved on eminent domain since 2007. The state has deregulated cable for the consumer but still needs to reform telecom. Like Hawaii and Pennsylvania, Virginia has no form of community rating for health insurance. However, coverage mandates are extensive, adding significantly to the cost of insurance.

Virginians suffer from too little personal freedom compared to citizens of other states. The state scores especially poorly on victimless crimes and drug enforcement (although it does better than many of its southern peers, with the notable exception of North Carolina). Gun control laws score better than average, but with much room for improvement. Open carry is allowed, but dealers must be licensed, and there are unnecessary restrictions on multiple purchases. Marijuana laws are largely unreformed, and even Salvia has been banned. Virginia requires 13 years of mandatory schooling, including kindergarten attendance, and imposes significant standardized testing and notification requirements on homeschoolers, but otherwise leaves both private and home schools alone. Virginia’s asset forfeiture laws could be improved. As one might expect given its history with tobacco, Virginia’s cigarette tax is the lowest in the country, and smoking is not banned in private workplaces. However, it does have some smoking restrictions. Unfortunately for liquor drinkers, its spirits tax rate is the third highest in the country. Beer and wine purchasers face rates a bit better than the national norm. Virginia underperforms the nation on gaming freedom, but does allow social gambling.

Policy Recommendations

Reduce the number of state and local government employees to levels consistent with Virginia’s low levels of spending and taxation.

Reduce health insurance mandates to the national average: this change would have raised the state three spots on regulatory policy and one spot on overall freedom.

Reform the victimless crimes regime to make it consistent with national norms. Doing this would have raised Virginia’s personal freedom ranking from 38th to 22nd, and its overall freedom ranking from 8th to 6th.